Support

A cookie is a piece of data stored by your browser or device that helps websites like this one recognize return visitors. We use cookies to give you the best experience on BNA.com. Some cookies are also necessary for the technical operation of our website. If you continue browsing, you agree to this site’s use of cookies.

Events

Bloomberg Next marketing services allow clients to elevate their brands and extend their reach through our established and trusted expertise, enhanced with engaging event production, appealing design, and compelling messaging.

Aug. 11 — The members of the National Labor Relations Board disagree about how the agency's
regional directors can use investigative subpoenas in unfair labor practice cases
where a charging party alleges that two or more entities are joint employers under
federal labor law.

The question is whether a regional office should have enough evidence to make a threshold
showing of a joint employer relationship before the NLRB issues its often-extensive
subpoenas for documents and testimony to business entities.

In several recent cases, the NLRB's three Democrats have relied on the board's broad
investigative authority to uphold the use of subpoenas, while the board's sole Republican
member has argued that regional directors should have more than a bare allegation
of a joint employer relationship before launching such information demands. The fifth
seat on the board currently is vacant.

Several management attorneys told Bloomberg BNA they share the dissenting board member's
concern about the NLRB's use of subpoenas, while a union lawyer said subpoenas are
critical to untangling business relationships and structures that are often obscure.

Use of Subpoenas May Have Major Impact

The board's use of investigative subpoenas has an immediate practical impact for many
businesses and industries.

The NLRB expanded its joint employer standards in
Browning-Ferris Industries of California, Inc., 362 N.L.R.B. No. 186, 204 LRRM 1154 (2015), holding that a business may be liable as a joint employer if it indirectly
controls an employment relationship or has reserved the right to do so.

Benjamin E. Stockman, who represents management in Venable LLP's labor and employment
group, told Bloomberg BNA Aug. 9 that the board made it clear in
Browning-Ferris that its analysis of joint employer relationships will be very fact-intensive.

If the board uses investigative subpoenas to probe potential joint employment relationships,
the agency will be looking not only at contracts between organizations, but how multiple
companies implement those contracts.

“That's really where the rubber meets the road,” Stockman said. Subpoenas focused
on such practical realities are likely to be more complex and potentially burdensome
than simple inquiries about the formal relationships between organizations, he said.

Stockman also expects NLRB regional offices will not just seek documents related to
joint employer claims, but will use subpoenas to obtain testimony about possible joint
employer relationships. Fielding such inquiries during the investigation of an unfair
labor practice case is “obviously concerning for employers,” he said.

Statute Permits Investigative Subpoenas

Section 11 of the National Labor Relations Act, 29 U.S.C. § 161, empowers the NLRB to issue subpoenas for the attendance of witnesses and production
of evidence in board proceedings, including “all hearings and investigations” and
covering “any matter under investigation or in question.”

Section 11(1) and board regulations (29 C.F.R. § 102.31)
allow petitions to revoke subpoenas and provide for appeals of subpoena rulings, but
they do not set standards for the issuance of subpoenas.

Section 11(1) requires the board to revoke a subpoena that “does not relate to any
matter under investigation” or that “does not describe with sufficient particularity
the evidence whose production is required.”

Board Divided on Subpoena Standard

In
Dolchin Pratt, LLC, 2015 BL 366867, NLRB, No. 5-CA-135334,
order 11/6/15, an NLRB regional office was investigating charges filed by a Baltimore unit
of the Industrial Workers of the World against Dolchin Pratt LLC, an operator of Jimmy
John's sandwich shops, and several other entities.

The organizations filed petitions to revoke regional office subpoenas that sought
information about the relationships between the companies.

In a 2-1 order, Chairman Mark Gaston Pearce and Member Kent Y. Hirozawa
denied the petitions. The board members said the subpoenas sought information relevant to
the matters under investigation, and they met the requirement of describing the evidence
sought with sufficient particularity

Dissent Called for ‘Objective, Factual' Basis

Member Philip A. Miscimarra dissented. He said the NLRA “requires more in this case
then merely stating the name of a possible single or joint employer on the face of
the charge.”

Miscimarra cited Section 10054.4 of the NLRB's Casehandling Manual as the board's
own statement that regional offices should obtain “additional and more complete evidence,
including all relevant documents”
if a charging party's own evidence and preliminary information “suggests a prima facie
case.”

The dissenting board member said he would grant the petitions to revoke the subpoenas
because the NLRB general counsel “failed to articulate an objective, factual basis
for investigating possible single or joint employer relationships between Jimmy John's
Franchise, LLC and the other Petitioners.”

Miscimarra said he would support the general counsel's issuance of the subpoenas “if
he can establish an objective, factual basis supporting such an inquiry, beyond the
mere allegation in the second amended charges that Jimmy John's is a joint and/or
single-employer with the other Petitioners.”

Former General Counsel Calls View ‘Well-Taken.'

Ronald Meisburg, a former NLRB member and general counsel, is now special counsel
at Hunton & Williams in Washington, where he represents employers. He told Bloomberg
BNA Aug. 10 that Miscimarra's objection was “well-taken.”

Meisburg, who served as NLRB general counsel from January 2006 to June 2010, said
the general counsel’s office has traditionally required charging parties to produce
evidence sufficient to make a prima facie showing of an unfair labor practice before
utilizing investigative subpoenas.

Even when the agency is investigating cases that depend heavily on proving facts
known only to the charged parties, “something more than a bare allegation of a legal
conclusion is needed,” he said.

Meisburg said joint employer cases can be extremely expensive to investigate and litigate—both
for employers and for the NLRB. Employers and taxpayers should not be forced to shoulder
such burdens based on “a bare allegation of joint employer status,” he said.

Lawyers Argue Need for Subpoenas

Stockman called Miscimarra's dissent “common sense” and said employers hope NLRB regional
directors always engage in meaningful deliberations before they approve subpoenas
that can be extensive and burdensome.

An employer can petition to revoke a subpoena that is overbroad or burdensome, but
a choice between costly subpoena compliance and expensive litigation “can be cold
comfort,” the attorney said.

However, a union-side lawyer stressed the importance of NLRB subpoenas in joint employer
cases.

Barbara J. Chisholm, a partner in Altshuler Berzon LLP in San Francisco, told Bloomberg
BNA Aug. 11 her firm's experience has been that without access to information about
how franchiser systems work, it is “difficult to untangle” how business relationships
are structured and whether a joint employer relationship exists.

Employers often contend such information is confidential, and obtaining relevant information
without a subpoena may simply not be practicable, Chisholm said.

Majority Cites Record of Judicial Support

Pearce and Hirozawa responded to Miscimarra's dissent that nothing in the NLRA or
the board's regulations imposes a requirement that a regional director articulate
an objective, factual basis to support the issuance of a subpoena.

Federal courts have a long history of deferring to the use of subpoenas by the NLRB
and other agencies, and Pearce and Hirozawa relied on that tradition in refusing to
revoke the
Dolchin Pratt subpoenas.

The U.S. Supreme Court has “decisively rejected the contention that a demonstration
of probable cause or other threshold factual showing is a prerequisite to the exercise
of the subpoena power of an administrative agency in the course of a legitimate investigation
to determine whether and against whom proceedings should be initiated,” Pearce and
Hirozawa wrote.

‘Preliminary Information' Can Justify Subpoena

In orders much the same as the one approved in
Dolchin Pratt, the board permitted investigative subpoenas on joint or single employer issues in
2-1 rulings over Miscimarra's dissents in
Strategic Staffing Solutions, 2016 BL 182605, NLRB, No. 31-CA-159135,
order 6/8/16, and
DT Management, LLC,
2016 BL 222990 and
2016 BL 222992, NLRB, No. 31-CA-160946,
orders 7/12/16.

However, in
Panera Bread, LLC, 2015 BL 402047, NLRB, No. 7-CA-136917,
order 12/8/15, the board (Members Miscimarra, Hirozawa, and Lauren McFerran) agreed to
deny a petition to revoke a subpoena in a case where Panera LLC was alleged to be
a joint or single employer with other corporate entities.

The board, in a brief
order, said the subpoena sought information that was relevant to the proceeding, and described
the information with sufficient particularity.

Miscimarra wrote in a footnote that he stood by the position he articulated in
Dolchin Pratt, but found “an adequate basis” for the subpoenas in
Panera because “preliminary information”
included one or more agreements between business entities alleged by a union to be
joint or single employers.

Members Remain Split on Predicate for Subpoenas

The board's most recent order on a joint employer subpoena was issued in
Microsoft Corp., 2016 BL 231125, NLRB, No. 19-CA-162985,
order 7/19/16.

The board
refused
to revoke a subpoena, and Members Hirozawa and McFerran restated the board majority's
position that the regional director who issued the document subpoena to Microsoft
acted within “the Board's broad investigative authority.”

Miscimarra filed essentially the same dissent as in
Dolchin Pratt, concluding that an unfair labor practice charge by Temporary Workers of America
alleging that Microsoft and Lionbridge Technologies are joint employers did not give
the NLRB general counsel an “objective factual basis for subpoenas documents regarding
the possible joint employer relationship.”

To contact the reporter on this story: Lawrence E. Dubé in Washington at
ldube@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at
smcgolrick@bna.com

All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to books@bna.com.

Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)

Notify me when updates are available (No standing order will be created).

This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to research@bna.com.

Put me on standing order

Notify me when new releases are available (no standing order will be created)